OPEC Signals It's Ready to Talk Production Cuts After Oil Makes Biggest 3 Day Gain Since 1990
Responding to near multi-year low oil prices, OPEC says that it may be ready to talk to other producers - just as oil futures rise almost 8%.
A statement released today by the Organization of the Petroleum Exporting Countries (OPEC), spurred by near multi-year low oil prices, signalled that it may be ready to talk to other producers over cutting oil production levels.
The news comes as crude futures Monday made a third day of huge gains, with Brent rising more than 8 percent, making it the biggest three day gain since 1990, Reuters noted.
"Today's continuing pressure on prices, brought about by higher crude production, coupled with market speculation, remains a cause for concern for OPEC and its members - indeed for all stakeholders in the industry," said OPEC in its latest bulletin.
"OPEC, as always, will continue to do all in its power to create the right enabling environment for the oil market to achieve equilibrium with fair and reasonable prices.
As the Organization has stressed on numerous occasions, it stands ready to talk to all other producers. But this has to be on a level playing field. OPEC will protect its own interests
"As the Organization has stressed on numerous occasions, it stands ready to talk to all other producers. But this has to be on a level playing field. OPEC will protect its own interests."
However OPEC also noted that the demand future demand forecast was positive.
"If the wide-ranging projections on oil demand are correct, then it is just a case of riding out the storm and waiting for calmer waters to return," it warned.
Crude and Brent prices rose more than $10 a barrel over its three-day run, reversing the decline in prices seen during August.
"Sharp gains over the past three trading sessions were driven by a combination of short covering and chart-readers again looking to call a bottom falsely," stated Citi, reportedly suggesting that prices may soon return to their recent downward trend.
The sudden rise is said to have sent waves of uncertainty throughout the market, highlighting the volatility of current oil prices.
"There's extreme volatility, with London out and the market is rallying on the OPEC headline," said Scott Shelton, commodities specialist at ICAP plc in North Carolina, noting the public holiday in the UK today.
Last week, Bijan Zanganeh, Oil Minister for Iran, said an emergency OPEC meeting may be "effective" in stabilizing oil prices.